Which of the following would shift both the short-run aggregate supply curve and the long-run aggregate supply curve leftward?
A)Decreases in the prices of the factors of production that reflect permanent changes in their supplies
B)Increases in the prices of the factors of production that do not reflect permanent changes in their supplies
C)Decreases in the prices of the factors of production that do not reflect permanent changes in their supplies
D)Increases in the prices of the factors of production that reflect permanent changes in their supplies
E)Decreases in the aggregate price level

Question

Quizplus · Accepted Answer

Only D would shift both the short-run and long-run aggregate supply curves leftward, as an increase in the prices of factors of production that reflect permanent changes in their supplies would increase costs for firms and reduce their ability to produce goods and services in the short and long run. A, B, C, and E would shift one or both curves differently.

Which of the Following Would Shift Both the Short-Run Aggregate